CHICAGO: US wheat futures rose for the fourth day in a row Thursday, briefly breaking above $9 a bushel, as traders staked out positions ahead of a government report expected to show tightening global supplies.
Soybean futures fell, pressured by declining export demand, and pulled corn prices lower, traders said.
The market's focus remained on wheat as expectations of smaller crops in places like Argentina and Australia, coupled with dry conditions in key growing areas of the US Plains, provided support to a commodity that has been stuck in a narrow trading range for months.
Wheat bulls were hopeful that problems with the crop overseas could boost demand for US supplies on the export market.
"Kansas, Colorado and Nebraska are dry and global wheat stocks are falling. At some point this winter wheat business is going to shift back to the US That time is getting pretty close," a wheat trader on the floor of the Chicago Board of Trade said.
At 11:31 a.m. CDT (1731 GMT) CBOT December soft red winter wheat futures were up 3-3/4 cents at $8.97-3/4 a bushel. Prices peaked at $9.03-1/4, their first time above $9 a bushel since Oct. 1.
CBOT wheat has risen 3.8 percent so far this week, its biggest four-day rally since August.
January soybean futures were 9 cents lower at $14.98 a bushel. CBOT December corn dropped 2 cents to $7.42-1/4 a bushel.
The US Agriculture Department said early on Thursday that weekly export sales of soybeans were at their lowest point in 16 months. Net soybean export sales of 191,900 tonnes were well below forecasts for 600,000 to 800,000 tonnes and included a cancellation of 545,600 tonnes from an unknown country.
"Cancellations in export sales in soybeans certainly will not go unnoticed," said Greg Wagner, president of GWX - Ag Advisors. "It begs the questions as to whether or not the market's poor price performance ... might in fact partly reflect a nervousness regarding future cancellations."
A firm dollar, which makes investors less likely to stock their portfolios with risky assets such as grains and reduces the need to buy commodities as a hedge against inflation, added further pressure on corn and soybeans.
Volume was light ahead of the release of USDA's monthly supply and demand report on Friday.
Analysts expect the government will boost its forecast for US corn and soybean yields. Field reports from harvest indicate the damage from the worst drought to hit the Midwest in more than 50 years was not as bad as initially feared.
USDA also was seen cutting its global wheat stocks forecast for the second month in a row due to weather-related problems in key growing areas such as Ukraine, Australia and Argentina.
"We have seen cash wheat markets strengthen because of quality concerns in Australia, Brazil and Argentina," said Brett Cooper, a senior markets manager at INTL FCStone Australia.
"There is a view that these quality issues in the southern hemisphere will switch demand to the United States."
Australia, the world's second-largest wheat exporter, is expecting a much smaller crop this year, with early harvest showing lower protein scales and poor yields. Traders said rains forecast over the nation's east coast could slow the harvest.
Asia's top buyers, who rely on Australia for the bulk of their milling wheat supplies, may be forced to import larger volumes of high-protein spring wheat from the United States and Canada.
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